The progressive creation of a unified European legal space has been one of the most significant achievements of the first fifty years of European integration. The Single Market depends on the unification of norms: without certainty in laws and cross-border harmonization in their implementation, freedom of movement, freedom to compete, market competition, and consumer sovereignty would all be principles devoid of factual content.
Legal integration has gone well beyond the minimum required by European law. We have gone from common technical and qualitative standards for European goods to a full-fledged European corporate law and common legal discipline of banking and insurance. Furthermore, it is European law regulating mergers and acquisitions. Similarly, the protection of workers’ rights in case of company relocations no longer pertains to national legislation. Even conditions for floating equity on stock exchanges have been unified across Europe, in order to protect investors. And what about consumer protection? Well, there are countries like Italy who acknowledge consumer rights solely on the basis of European legislation. In contract law, there is not a single national provision that is not overridden by European rules.
It is then striking to note that the 1957 Treaty of Rome contained basically nothing in this respect. It is the virtuous dynamics of economic integration that has led to juridical unification across Europe, going beyond the original intent of founding countries. The Court of Justice has played a fundamental role: first, by giving legal efficacy to Treaty clauses; secondly by considering the national judiciary as part of the European judiciary, when they enforce European norms; thirdly, by determining that national judges must give precedence to EU law when national legislation is inadequate.
Legal unification found a powerful driver in the 1997 Treaty of Amsterdam, which brought justice and internal affairs within the European jurisdiction, so as to flesh out the space of freedom, security and justice guaranteed to European citizens by the 1992 Maastricht Treaty. This has led to the mutual recognition of judicial pronouncements in civil law, and, more recently and controversially, because of the possible restrictions on personal liberties, to the establishment of a European arrest warrant in penal law.
Where legal unification is not complete, the interesting issue of competition between normative systems arises. Today, one can register a company in Britain, where costs and red-tape are low, and then set up the activity in another European country, without no more than formal links with respect to the country where the company is registered. Even this form of competition brings about unification, because deregulation pushes the most bureaucratic countries to simplify their procedures. National legislators and political parties had better heed these developments, while European institutions must make sure that competition does not entail a race to bottom, which would threaten the rights of citizens, either as consumers or workers.
by Giorgio Sacerdoti,
Full Professor of International law, Università Bocconi